Robinhood’s third-quarter earnings beat estimates, shares rise after hours

Retail app Robinhood (HOOD) announced third-quarter earnings on Wednesday which showed the company beat revenue and profit estimates thanks to higher benefits gained from higher prices.

But the platform failed to maintain its monthly active users at consensus expectations. It lost 1.8 million monthly active users for the period, a quarterly decline of 12.8% to 12.2 million, the lowest since it was listed as a publicly traded company.

HOOD stocks that sold over 33% Year-to-date, it is up 4% in after-hours trading at $11.75, erasing much of Wednesday’s short selling of 4.3%.

“In the third quarter, we achieved our goal of reaching adjusted profitability before interest, tax, depreciation and amortization, one quarter earlier than planned,” Robinhood CEO and Co-Founder Vlad Tenev said in its earnings statement.

Here is a summary of the company’s results:

  • he won: 361 million dollars Against expectations of $357.7 million

  • net loss: ($175 million) or ($0.20) diluted earnings per share vs. expectations ($0.27) diluted earnings per share

  • Monthly active users in a quarter: 12.2 1 million against expectations of 13.74 million

India – 07/17/2022: In this photo illustration, the Robinhood logo is shown on an Android mobile phone. (Image illustration by Avishek Das/SOPA Images/LightRocket via Getty Images)

Options trading brought in $124 million in revenue from Robinhood. Shares traded at $31 million, a 7% improvement over the previous quarter. Meanwhile, revenue from cryptocurrency transactions fell 12% to $51 million from $58 million in the second quarter, as global crypto trading volume declined during the quarter.

“We have delivered the most important feature requests to clients including advanced schemes, cash account options, instant withdrawals, and our 3 web wallet,” said Teneff. “Next week, we will raise the yield on uninvested cash for our Gold members – making it one of the best rates in the industry.”

Over the past year, Robinhood’s transaction revenue has fallen from $266 million in the third quarter of 2021 to $202 million in the fourth quarter. This quarter, transaction revenue came in at $208 million, below expectations of $211.45 million, according to Bloomberg.

Like many high-growth counterparts serving retail investors, the company has made significant expense cuts to reach profitability.

On the same day it released its second-quarter earnings results, the company announced that it had laid off more than 1,000 employees after closing two offices earlier this year.

The silver lining for the Menlo Park, Calif., brokerage was net interest income, which increased 73% to $128 million, thanks to higher interest rates during the third quarter.

David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at Tweet embed

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